What algorithm does Blender use to simulate the interaction between fluid and object?
The wanted information were found by both googling the keywords "blender fluid simulation" which leads to this page of the 2.4 documentation and some grep in the source code of Blender.

In this doc page, you can see a "technical details" chapter which indicates three algorithms :


Lattice Boltzmann Method (LBM)
Navier-Stokes (NS)
Smoothed Particle Hydrodynamics (SPH). SPH seems to be approximations to the Lagrangian formulation of the Navier-Stokes equations


From that, I did only grep in the Visual Studio solution (don't imagine a minute I know anything more about all that...). For instance :



To summarize :


LBM is in simulation_object.cpp
SPH is in particle_system.c